Breakthrough Products

Products that are technologically advanced and creatively superior to existing products in the market

What are Breakthrough Products?

Breakthrough products, also called pioneers, are products that are technologically advanced and creatively superior to existing products in the market. In other words, breakthrough products fulfill a consumer’s need to a greater degree than existing products do while being more technologically advanced and innovative. Simply said, every invention or innovative product is considered a breakthrough product.

Breakthrough Products

The Impact of Breakthrough Products

Breakthrough products establish a completely new market or revolutionize competition and consumer preferences in an existing market. The products enjoy the advantage of being the first movers in the market and are able to establish an early market share lead. Although all breakthrough products are first movers, they may not succeed in the marketplace in the long run.

In many cases, imitation products are able to identify the weaknesses of breakthrough products and use them as a means to gain an advantage in the marketplace. As breakthrough products are the first to enter the marketplace, they generally come with less sophisticated designs and are priced relatively higher. This situation leaves significant room for new products to refine their designs and offer a lower-priced competitive product that may offer even more than the original.

For example, consider the Apple iPhone – a breakthrough product. The iPhone revolutionized the way people use their phones. Suddenly, people could now use their phones to listen to music. The iPhone also created a new industry that was geared toward mobile phone accessories. As we’ve seen in the marketplace, it did not take long for overseas manufacturers to create an “identical” Apple iPhone and at a lower price point (think of Chinese replicas), or for Android phones to copy the iPhone’s features.

Challenges in Creating a Breakthrough Product

Creating a breakthrough product is a challenging task. Companies spend extensive amounts of dollars on research and development to develop breakthrough products. There is a myriad of challenges in creating a breakthrough product, including the following:

1. Concept generation

Typically, creating a breakthrough product requires meeting the needs of a customer that they were not initially aware of. Thinking of a successful idea for a breakthrough or innovative product is a major challenge.

2. Technology

Creating an innovative or new technology is a hard task and takes months, if not years, to theorize (how will the technology work?) and actually create. In addition, testing the technology is an important factor to take into consideration.

3. Resources

Abundant amounts of time and money are required to create a breakthrough product.

4. Risk Management

Breakthrough products are not all successful – it is important to adopt appropriate risk management steps when developing a breakthrough product.

Above all else, it is important to be able to get consumers to easily understand the product and accept it. If the product concept is difficult to understand, that can lead to failure.


Consider the invention of cars in the early 20th century. Traditionally, cars used petrol and diesel engines to operate. However, through years of innovations, a car’s mileage, speed, efficiency, and fuel consumption improved significantly. One of the breakthroughs in the automotive industry was the introduction of modern, highway-capable electric cars by Tesla Motors in 2004.

The Tesla Roadster was the first highway legal, all-electric car, and the first production all-electric car to be able to travel more than 200 miles per charge. Therefore, electric cars such as the Tesla Roadster are an example of a breakthrough product in the automobile sector.

Food for Thought: Innovative Products of 2018

Listed below are some innovative products of 2018 that revolutionized consumer preferences and changed the landscape of the marketplace.

  • The Smacircle S1: A foldable electric bike that can fit into a backpack.
  • The Power Dolphin: A drone that is suitable for water sports, fishing, capturing 4K videos and photos, and creating topographical maps of the ocean floor.
  • The Samsung Flip: An innovative digital flipchart used to improve team collaboration.

Additional Resources

CFI is the official provider of the global Financial Modeling & Valuation Analyst (FMVA)™ certification program, designed to help anyone become a world-class financial analyst. To keep learning and advancing your career, the additional CFI resources below will be useful:

Financial Analyst Certification

Become a certified Financial Modeling and Valuation Analyst (FMVA)® by completing CFI’s online financial modeling classes and training program!

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